Airline Alliances Low Cost Airlines Tourism Essay

In this chapter, a clear definition will be given on the term: “ confederation ” . Furthermore, different types of confederations will be explained. Besides, the development of air hose confederations in the universe will be given. Furthermore, it will be explained what advantages there are for air hoses that join an confederation.


As a footing for this chapter, a definition will be given of the term ‘alliance ‘ .

Harmonizing to Stanford-Smith, Chiozza & A ; Edin, a strategic confederation can be defined as “ Any signifier of long-run co-operation between two or more administrations, where the ‘parent ‘ administrations remain separate legal entities, which is intended to basically alter the merchandise or service, or its production/delivery method, in a given concern unit ” ( Stanford-Smith, Chiozza & A ; Edin, 2002, p.958 ) .

Development of air hose confederations

The first international air hose confederation was signed in 1986 whereby Air Florida provided a rider provender for British Island ‘s London-Amsterdam path ( Vasigh, Fleming & A ; Tacker, 2008, p.166 ) . However, this was merely a simple version of an confederation, called a code-share understanding. This enables an air hose to reassign a rider on a flight of one air hose, to a flight of the collaborating air hose. There are code-share understandings that merely covers one or a few paths of both air hoses, e.g. Amsterdam-Paris and Paris-Madrid. Besides, there are code-share understandings that cover the full web of both air hoses. These code-share understandings can be considered as the foundation of the air hose alliances these yearss. The first major transatlantic air hose confederation with a broad code-share understanding was signed by KLM Royal Dutch Airlines and Northwest Airlines ( based in the USA ) in 1992. In 1993, the confederation gained its mandates by the US authorities, which enabled both air hoses to pull off their operations between the United States and the Netherlands.

After some successful and non-successful creative activities of code-sharing understandings, the following phase was the creative activity of planetary confederations. The first truly planetary confederation was formed in 1997 between United, Lufthansa, SAS, Air Canada, and Thai Airways. This confederation was called the Star Alliance and was shortly followed by similar planetary confederations ( Vasigh, Fleming & A ; Tacker, 2008, p.167 ) . As from this point, confederations have been adding more and more air hoses in order to make finishs that are located all over the universe. As for the air hoses themselves, they were really acute to fall in an confederation because of the many advantages that come with it. These advantages will be pointed out subsequently on in this paper.

These yearss, three major planetary confederations exist: Star Alliance, Oneworld and Skyteam. In the undermentioned subdivisions, these three air hose confederations will be briefly illustrated.

1.3.1 Star Alliance

Star Alliance has been created in 1997 by five air hoses: Air Canada, Lufthansa, Scandinavian Airlines, Thai Airways and United Airlines. The confederation, based in Frankfurt am Main ( Germany ) , serves over 1,100 finishs in more than 180 states worldwide, including now – in 2011 – 27 member air hoses across the Earth. All members together transport over 600 million riders, holding a entire gross of 150 billion US-dollars.

Adria Airlines

Asiana Airlines

Croatia Airlines


US Air passages





Air Canada


LOT Polish

TAP Portugal

Air China

Body mass index


Thai Airways

Air New Zealand

Brussels Airlines

SAS Norse

Turkish Airlines




United Airlines

Table 1.1 Star Alliance member air hoses

Harmonizing to the web site of Star Alliance, their mission is: “ Executing leading in pull offing a portfolio of confederation merchandises and services utilizing an in agreement procedure ” ( Star Alliance, 2011 ) .

1.3.2 One Universe

One World has been founded in 1999 by establishing air hoses American Airlines, British Airways, Cathay Pacific, Canadian Airlines and Qantas ( OneWorld, 2011, p.17 ) . The central office of OneWorld is located in Vancouver, Canada, although there are programs to relocate the confederation ‘s cardinal squad from Vancouver to New York ‘s Manhattan during 2011 ( OneWorld, 2011, p.8 ) . The confederation now contains 14 air hoses that fly to more than 750 finishs spread over about 150 states. Together, the member air hoses fly over 330 million riders a twelvemonth ( 2010 ) , holding a entire rider gross of a little more than 90 billion US-dollars a twelvemonth in 2010.

American Airlines

Local area network

Kingfisher Air ( 2011 )

British Air passages


Air Berlin ( 2011 )

Cathay Pacific





Royal Jordanian

Japan Airlines

S7 Airlines

Table 1.2 One World member air hoses

All the member air hoses that represent the One World confederation have as common vision: “ To bring forth more value for clients, stockholders and employees than any air hose can accomplish by itself ” ( OneWorld, 2011, p.2 ) .

1.3.3 SkyTeam

The Skyteam confederation was created in 2000 by Aeromexico, Air France, Delta Air Lines and Korean Air. The confederation has now ( 2011 ) got 13 member air hoses, holding its central office at Amsterdam Schiphol Airport, the Netherlands. All 13 air hoses together fly to about 900 finishs over 170 states worldwide. In 2009, the confederation transported around 385 million riders, holding a entire rider gross of 89 billion US-dollars on a annual footing.


Czech Airlines


Delta Airlines

Air Europa

Kenya Airways

Air France/KLM

Korean Airlines



China Southern

Vietnam Airlines

Table 1.3 Skyteam member air hoses

Types of confederations

As stated in Pull offing Strategic Airline Alliances by Kleymann and Seristo ( 2004 ) , an air hose confederation consist of several different types of concerted links. Nine signifiers of cooperation can be distinguished.

Cost sharing ventures

In the instance of a cost sharing venture, two or more air hoses jointly purchase equipment, for illustration purchase aircraft at the same time at a maker. Two or more air hoses agree on common design of the aircraft, including the inside and engines. However, it could be hard for air hoses, because each air hose has its ain penchants. In the late ninetiess, three Latin American air hoses jointly purchased about 100 Airbus A318/A319 aircraft. In 2003, four Star Alliance members had the purpose to bulk purchase up to 200 standardized regional aircraft ( Doganis, 2006 ) .

Asset pools

This type of cooperation can frequently be found in care, where two or more air hoses jointly portion modesty parts which they warehouse at outposts or joint warehouses. For case, in 2009, Garuda Indonesia Airlines and KLM decided on an understanding that will offer KLM the chance to contract out the care of fan hood to Garuda Maintenance Facilities AeroAsia, which serves PT Garuda, the national air hose ( KLM Corporate, 2009 ) .

Pro-rate understandings

This is the most basic signifier of understanding between air hoses. A existent universe illustration is the understanding between Caribbean Star Airlines and Air Jamaica which was signed in 2006. The two air hoses foremost agreed on improved connectivity: the two air hoses ‘ agendas were adapted in order to make more transportation possibilities and to cut down the waiting clip of riders on connexion flights. Second, the air hoses agreed on improved pricing while offering lower menus when linking from one air hose to the other. This allows riders get downing their journey in the Caribbean to hold a cheaper ticket when linking in Jamaica to, for case, the United States ( Caribbean Press Releases, 2006 ) .

Code sharing

In the instance of a codification sharing, for illustration, KLM sells a flight under its ain air hose designator codification ( KL ) , although the flight is operated by another air hose, for case Air France. Harmonizing to Kleymann and Seristo ( 2004 ) , the advantage for KLM – in this instance – lies in “ its entree to markets without holding to physically run its ain aircraft at that place ” . The advantage for Air France – in this instance – is “ the ability to better make full the aircraft it operates on that peculiar path, ” viz. with its ‘own ‘ and KLM ‘s riders.


A feeder is a particular signifier of codification sharing which tends to be more hierarchal. An independent regional air hose, for illustration, can run a codification portion to a larger air hose ‘s hub. For illustration, CCM Airlines is a separate Gallic air hose based on Corsica. At some paths they besides operate under Air France ‘s designator codification ( AF ) , such as flights between Calvi ( Corsica ) and Paris ‘ Charles de Gaulle airdrome. On the other manus, they still operated flights under their ain air hose designator codification ( XK ) .

Selling confederations

A selling confederation can include three activities. First of all, joint advertisement, in which airlines net income of decreased costs for advertizements. Second, joint gross revenues, which makes it easier and cheaper for riders to unite paths between air hoses, and which is finally good for both air hoses. Finally, joint frequent circular programmes, in which two or more air hoses combine their frequent circular programmes, which allows their riders to besides derive ‘miles ‘ at the air hose ‘s spouse. An illustration of a joint frequent circular programme is Flying Blue, a programme of Air France and KLM.

Joint ventures

Harmonizing to Kleymann and Seristo ( 2004 ) , one of the chief advantages of joint ventures is that “ air hose direction can accomplish a merger-like state of affairs on certain markets, deepen cooperation and beltway ownership issues without holding to inquire for stockholder indorsement for this. ” So, these joint ventures are an chance for air hoses to unify on merely one of a couple portion of all activities, nevertheless non all.

Integrated Feeder

An incorporate feeder is different from a ‘regular ‘ feeder. As in a feeder understanding, the regional air hose is runing independently, while merely runing under the larger bearer ‘s designator on some paths. In an incorporate feeder understanding, the regional air hose is runing wholly under franchise to supply for its spouse air hose. An illustration is the Gallic regional air hose Regional. This air hose operates the regional, and largely domestic, Gallic web for Air France. Even though it has its ain trade name name, the air hose belongs for 100 per centum to the Air France Group. Therefore, Regional operates with the Air France designator codification ( AF ) on every flight they make within their ain web.

Equity bets

Zie in beginnings document knipsel uit pagina 11 uit Kleymann.

Advantages for fall ining an confederation